The sales tax
A) is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.
B) is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
C) is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
D) is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.
C
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The figure above shows the costs and demand curves for the Bigshow Cable Company. To avoid any deadweight loss in the market served by Bigshow, the regulator must set the price at
A) $8. B) $6. C) $4. D) $2.
The IS curve shows the combinations of ________ and ________ where the goods market is in equilibrium
A) aggregate expenditure; real GDP B) the real interest rate; real GDP C) potential GDP; aggregate expenditure D) the nominal interest rate; the quantity of money
The big-push strategy of development relies mainly on private incentives and a laissez- faire government policy
Indicate whether the statement is true or false
What happens to the Canadian M2 money supply if there is an excess demand of 100 million euros in the foreign exchange market and the central bank intervenes to offset the excess? Assume the M2 money multiplier is 3
a. The Canadian M2 money supply falls by 300 million euros worth of Canadian dollars. b. The Canadian M2 money supply rises by 300 million euros worth of Canadian dollars. c. The Canadian M2 money supply might fall or rise. d. The Canadian M2 money supply rises by 100 million euros worth of Canadian dollars. e. The Canadian M2 money supply falls by 100 million euros worth of Canadian dollars.